Organizational Change and Stress Management

Robbins: Organizational Behavior Chapter Nineteen

ORGANIZATIONAL CHANGE AND STRESS MANAGEMENT

LEARNING OBJECTIVES

After studying this chapter, students should be able to:

1. Describe forces that act as stimulants to change.2. Summarize sources of individual and organizational resistance to change.3. Describe Lewin’s three-step change model.4. Explain the values underlying most OD efforts5. Identify properties of innovative organizations.6. List characteristics of a learning organization.7. Define knowledge management and explain its importance.8. Describe potential sources of stress.9. Explain individual difference variables that moderate the stress-outcome relationship.

CHAPTER OVERVIEW

The need for change has been implied throughout this text. “A casual reflection on change should indicate that it encompasses almost all our concepts in the organizational behavior literature. Think about leadership, motivation, organizational environment, and roles. It is impossible to think about these and other concepts without inquiring about change.”

If environments were perfectly static, if employees’ skills and abilities were always up to date and incapable of deteriorating, and if tomorrow were always exactly the same as today, organizational change would have little or no relevance to managers. The real world, however, is turbulent, requiring organizations and their members to undergo dynamic change if they are to perform at competitive levels.

Managers are the primary change agents in most organizations. By the decisions they make and their role-modeling behaviors, they shape the organization’s change culture. For instance, management decisions related to structural design, cultural factors, and human resource policies largely determine the level of innovation within the organization. Similarly, management decisions, policies, and practices will determine the degree to which the organization learns and adapts to changing environmental factors.

We found that the existence of work stress, in and of itself, need not imply lower performance. The evidence indicates that stress can be either a positive or negative influence on employee performance. For many people, low to moderate amounts of stress enable them to perform their jobs better by increasing their work intensity, alertness, and ability to react. However, a high level of stress, or even a moderate amount sustained over a long period of time, eventually takes its toll and performance declines. The impact of stress on satisfaction is far more straightforward. Job-related tension tends to decrease general job satisfaction. Even though low to moderate levels of stress may improve job performance, employees find stress dissatisfying.

WEB EXERCISES

At the end of each chapter of this instructor’s manual, you will find suggested exercises and ideas for researching the WWW on OB topics. The exercises “Exploring OB Topics on the Web” are set up so that you can simply photocopy the pages, distribute them to your class, and make assignments accordingly. You may want to assign the exercises as an out-of-class activity, or as lab activities with your class. Within the lecture notes the graphic

will note that there is a WWW activity to support this material.

The chapter opens introducing Kun-Hee Lee, Samsung’s chairman. Lee challenged his staff to turn Samsung into a truly innovative company, applying cutting-edge technology. Lee achieved his goal of organizational change. Today Samsung is a leader in a number of innovative products including a combined cell phone and hand-held device, flat-screen TV’s, and ultra-thin laptops.

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Forces for Change Notes:

1. Organizations face a dynamic and changing environment. This requires adaptation. Exhibit 19-1 summarizes six specific forces that are acting as stimulants for change.

2. The changing nature of the workforce:

A multicultural environment.

Human resource policies and practices changed to attract and keep this more diverse workforce.

Large expenditure on training to upgrade reading, math, computer, and other skills of employees

3. Technology is changing jobs and organizations:

Sophisticated information technology is also making organizations more responsive. As organizations have had to become more adaptable, so too have their employees.

We live in an “age of discontinuity.” Beginning in the early 1970s with the overnight quadrupling of world oil prices, economic shocks have continued to impose changes on organizations.

4. Competition is changing:

The global economy means global competitors.

Established organizations need to defend themselves against both traditional competitors and small, entrepreneurial firms with innovative offerings.

Successful organizations will be the ones that can change in response to the competition.

5. Social trends during the past generation suggest changes that organizations have to adjust for:

The expansion of the Internet, Baby Boomers retiring, and people moving

from the suburbs back to cities

A global context for OB is required. No one could have imagined how world politics would change in recent years.

September 11th has caused changes organizations have made in terms of practices concerning security, back-up systems, employee stereotyping, etc.

Managing Planned Change Notes:

1. Some organizations treat all change as an accidental occurrence, however, change as an intentional, goal-oriented activity is planned change.

2. There are two goals of planned change:

Improve the ability of the organization to adapt to changes in its environment.

Change employee behavior.

3. Examples of planned-change activities are needed to stimulate innovation, empower employees, and introduce work teams.

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Robbins: Organizational Behavior Chapter NineteenManaging Planned Change (cont.) Notes:

5. An organization’s success or failure is essentially due to the things that employees do or fail to do, so planned change is also concerned with changing the behavior of individuals and groups within the organization.

5. Who in organizations are responsible for managing change activities?

Change agents can be managers, employees of the organization, or outside consultants.

Typically, we look to senior executives as agents of change.

6. For major change efforts, top managers are increasingly turning to temporary outside consultants with specialized knowledge in the theory and methods of change.

Consultant change agents can offer a more objective perspective than insiders can.

They are disadvantaged in that they often have an inadequate understanding of the organization’s history, culture, operating procedures, and personnel.

Outside consultants are also more willing to initiate second-order changes.

Internal change agents are often more cautious for fear of offending friends and associates.

Resistance to Change Notes:

1. One of the most well-documented findings is that organizations and their members resist change.

It provides a degree of stability and predictability to behavior.

There is a definite downside to resistance to change. It hinders adaptation and progress.

2. Resistance to change does not necessarily surface in standardized ways.

Resistance can be overt, implicit, immediate, or deferred.

It is easiest for management to deal with resistance when it is overt and immediate.

3. Implicit resistance efforts are more subtle—loss of loyalty to the organization, loss of motivation to work, increased errors or mistakes, increased absenteeism due to “sickness”—and hence more difficult to recognize.

4. Similarly, deferred actions cloud the link between the source of the resistance and the reaction to it.

A change may produce what appears to be only a minimal reaction at the time it is initiated, but then resistance surfaces weeks, months, or even years later.

a. Reactions to change can build up and then explode seemingly totally out of proportion.

b. The resistance was deferred and stockpiled, and what surfaces is a cumulative response.

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A. Individual Resistance Notes:

Five reasons why individuals may resist change are (See Exhibit 19-2):

1. Habit: Life is complex, to cope with having to make hundreds of decisions everyday, we all rely on habits or programmed responses.

2. Security: People with a high need for security are likely to resist change because it threatens their feelings of safety.

3. Economic factors: Another source of individual resistance is concern that changes will lower one’s income.

4. Fear of the unknown: Changes substitute ambiguity and uncertainty for the known.

5. Selective information processing: Individuals shape their world through their perceptions. Once they have created this world, it resists change.

B. Organizational Resistance

Organizations, by their very nature, are conservative. They actively resist change. There are six major sources of organizational resistance: (See Exhibit 19-4.)

1. Structural inertia: Organizations have built-in mechanisms to produce stability; this structural inertia acts as a counterbalance to sustain stability.

2. Limited focus of change: Organizations are made up of a number of interdependent subsystems. Changing one affects the others.

3. Group inertia: Group norms may act as a constraint.

4. Threat to expertise: Changes in organizational patterns may threaten the expertise of specialized groups.

5. Threat to established power relationships: Redistribution of decision-making authority can threaten long-established power relationships.

6. Threat to established resource allocations: Groups in the organization that control sizable resources often see change as a threat. They tend to be content with the way things are.

C. Overcoming Resistance to Change

1. Six tactics used by change agents in dealing with resistance to change:

2. Education and communication:

Resistance can be reduced through communicating to help employees see the logic of a change. The assumption is that the source of resistance lies in misinformation or poor communication.

It works provided that the source of resistance is inadequate communication and that management-employee relations are characterized by mutual trust and credibility.

3. Participation:

It is difficult for individuals to resist a change decision in which they participated.

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C. Overcoming Resistance to Change (cont.) Notes:

Prior to making a change, those opposed can be brought into the decision process, assuming they have the expertise to make a meaningful contribution.

The negatives—potential for a poor solution and great time consumption.

4. Facilitation and support:

Employee counseling and therapy, new-skills training, or a short paid leave of absence may facilitate adjustment. The drawbacks—it is time-consuming, expensive, and its implementation offers no assurance of success.

5. Negotiation:

Negotiation as a tactic may be necessary when resistance comes from a powerful source.

It has potentially high costs, and there is the risk that the change agent is open to the possibility of being blackmailed by other individuals in positions of power.

6. Manipulation and cooptation:

Manipulation refers to “covert influence attempts, twisting and distorting facts to make them appear more attractive, withholding undesirable information, and creating false rumors to get employees to accept a change.”

Cooptation is “a form of both manipulation and participation.” It seeks to “buy off” the leaders of a resistance group by giving them a key role in the change decision.

Both manipulation and cooptation are relatively inexpensive and easy ways to gain support. The tactics can backfire if the targets become aware that they are being tricked or used.

7. Coercion:

This is “the application of direct threats or force upon the resisters.”

Examples of coercion are threats of transfer, loss of promotions, negative performance evaluations, and a poor letter of recommendation.

Instructor Note: At this point in the lecture you may want to introduce the TEAM EXERCISE: Power and the Changing Environment found in the text and at the end of the chapter notes.

D. The Politics of Change Notes:

1. Change threatens the status quo, making it an inherently political activity.

2. Internal change agents typically are individuals high in the organization who have a lot to lose from change.

What if they are no longer the ones the organization values?

This creates the potential for others in the organization to gain power at their expense.

3. Politics suggests that the impetus for change is more likely to come from outside change agents.

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D. The Politics of Change (cont.) Notes:

4. Managers who have spent their entire careers with a single organization and eventually achieve a senior position in the hierarchy are often major impediments to change.

Change itself is a very real threat to their status and position, yet, they may be expected to implement changes.

When forced to introduce change, these long-time power holders tend to implement first-order changes. Radical change is too threatening.

5. Power struggles within the organization will determine the speed and quantity of change.

Long-time career executives will be sources of resistance.

Boards of directors that recognize the imperative for the rapid introduction of second-order change in their organizations frequently turn to outside candidates for new leadership.

Instructor Note: At this point in the lecture you may want to introduce the POINT—COUNTER POINT: Managing Change is an Episodic Activity found in the text and at the end of the chapter notes. A suggestion for a class exercise follows.

Approaches to Managing Organizational Change Notes:

A. Lewin’s Three-Step Model

1. Kurt Lewin argued that successful change in organizations should follow three steps (See Exhibit 9-5):

Unfreezing the status quo Movement to a new state Refreezing the new change to make it permanent

2. The status quo can be considered to be an equilibrium state.

2. To move from this equilibrium—to overcome the pressures of both individual resistance and group conformity—unfreezing is necessary.

The driving forces, which direct behavior away from the status quo, can be increased.

The restraining forces, which hinder movement from the existing equilibrium, can be decreased.

A third alternative is to combine the first two approaches.

4. Once the change has been implemented, the new situation needs to be refrozen so that it can be sustained over time.

Unless this last step is taken, there is a very high chance that the change will be short-lived and that employees will attempt to revert to the previous equilibrium state.

The objective of refreezing is to stabilize the new situation by balancing the driving and restraining forces.

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B. Action Research Notes:

1. Action research is “a change process based on the systematic collection of data and then selection of a change action based on what the analyzed data indicate.”

2. The process consists of five steps: diagnosis, analysis, feedback, action, and evaluation. These steps closely parallel the scientific method.

3. Diagnosis begins by gathering information about problems, concerns, and needed changes from members of the organization.

4. Analysis of information is synthesized into primary concerns, problem areas, and possible actions. Action research includes extensive involvement of the people who will be involved in the change program.

5. Feedback requires sharing with employees what has been found from steps one and two and the development of a plan for the change.

6. Action is the step where the change agent and employees set into motion the specific actions to correct the problems that were identified.

7. Evaluation is the final step to assess the action plan’s effectiveness. Using the initial data gathered as a benchmark, any subsequent changes can be compared and evaluated.

8. Action research provides at least two specific benefits for an organization.

First, it is problem-focused. The change agent objectively looks for problems and the type of problem determines the type of change of action.

Second, resistance to change is reduced. Once employees have actively

participated in the feedback stage, the change process typically takes on a momentum of its own.

C. Organizational Development

1. Organizational development (OD) is a term used to encompass a collection of planned-change interventions built on humanistic-democratic values that seek to improve organizational effectiveness and employee well-being.

2. The OD paradigm values human and organizational growth, collaborative and participative processes, and a spirit of inquiry.

3. The underlying values in most OD efforts:

Respect for people Trust and support Power equalization Confrontation Participation

4. OD techniques or interventions for bringing about change:

5. Sensitivity training:

It can go by a variety of names—laboratory training, groups, or T-groups (training groups)—but all refer to a thorough unstructured group interaction.

Participants discuss themselves and their interactive processes, loosely directed by a professional behavioral scientist.

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C. Organizational Development (cont.) Notes:

Specific results sought include increased ability to empathize with others, improved listening skills, greater openness, increased tolerance of individual differences, and improved conflict resolution skills.

6. Survey feedback:

One tool for assessing attitudes held by organizational members, identifying discrepancies among member perceptions, and solving these differences is the survey feedback approach.

Everyone can participate, but of key importance is the organizational “family.”

a. A questionnaire is usually completed by all members in the organization or unit.

b. Organization members may be asked to suggest questions or may be interviewed.

c. The questionnaire asks for perceptions and attitudes on a broad range of topics.

The data from this questionnaire are tabulated with data pertaining to an individual’s specific “family” and to the entire organization and distributed to employees.

a. These data then become the springboard for identifying problems and clarifying issues.

b. Particular attention is given to encouraging discussion and ensuring that discussions focus on issues and ideas and not on attacking individuals.

Finally, group discussion in the survey feedback approach should result in members identifying possible implications of the questionnaire’s findings.

7. Process consultation:

The purpose of process consultation is for an outside consultant to assist a manager, “to perceive, understand, and act upon process events” that might include work flow, informal relationships among unit members, and formal communication channels.

The consultant works with the client in jointly diagnosing what processes need improvement.

a. By having the client actively participate in both the diagnosis and the development of alternatives, there will be greater understanding of the process and the remedy and less resistance to the action plan chosen.b. The process consultant need not be an expert in solving the

particular problem that is identified. The consultant’s expertise lies in diagnosis and developing a helping relationship.

8. Team building:

It utilizes high-interaction group activities to increase trust and openness among team members.

Team building can be applied within groups or at the inter-group level.

Team building is applicable to the case of interdependence. The objective is to improve coordinative efforts of members, which will result in increasing the team’s performance.

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The activities considered in team building typically include goal setting, development of interpersonal relations among team members, role analysis, and team process analysis.

Team building attempts to use high interaction among members to increase trust and openness.

a. Begin by having members attempt to define the goals and priorities of the team.

b. Following this, members can evaluate the team’s performance—how effective is the team in structuring priorities and achieving its goals? c. This should identify potential problem areas.

Team building can also address itself to clarifying each member’s role on the team.

9. Intergroup development:

A major area of concern in OD is the dysfunctional conflict that exists between groups. It seeks to change the attitudes, stereotypes, and perceptions that groups have of each other.

There are several approaches to intergroup development. A popular method emphasizes problem solving.

a. Each group meets independently to develop lists of its perception of itself, the other group, and how it believes the other group perceives it.

b. The groups then share their lists, after which similarities and differences are discussed. d. Differences are clearly articulated, and the groups look for the

causes of the disparities.

Once the causes of the difficulty have been identified, the groups can move to the integration phase—working to develop solutions that will improve relations between the groups.

Subgroups, with members from each of the conflicting groups, can now be created for further diagnosis and to begin to formulate possible alternative actions that will improve relations.

10. Appreciative Inquiry:

Most OD approaches are problem-centered. They identify a problem or set of problems, then look for a solution. Appreciative inquiry seeks to identify the unique qualities and special strengths of an organization.

11. The AI process essentially consists of four steps:

Discovery. The idea is to find out what people think are the strengths of the organization. For instance, employees are asked to recount times they felt the organization worked best or when they specifically felt most satisfied with their jobs.

Dreaming. The information from the discovery phase is used to speculate on possible futures for the organization. For instance, people are asked to envision the organization in five years and to describe what is different.

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Design. Based on the dream articulation, participants focus on finding a common vision of how the organization will look and agree on its unique qualities.

Destiny. In this final step, participants discuss how the organization is going to fulfill its dream. This typically includes the writing of action plans and development of implementation strategies.

Contemporary Change Issues for Today’s Managers Notes:

A. Stimulating Innovation

1. How can an organization become more innovative? There is no guaranteed formula; certain characteristics surface again and again. They are grouped into structural, cultural, and human resource categories.

2. Change refers to making things different. Innovation is a more specialized kind of change.

Innovation is a new idea applied to initiating or improving a product, process, or service.

All innovations involve change, but not all changes necessarily involve new ideas or lead to significant improvements.

Innovations in organizations can range from small incremental improvements to significant change efforts.

3. Sources of innovation:

Structural variables are the most studied potential source of innovation.

First, organic structures positively influence innovation because they facilitate flexibility, adaptation and cross-fertilization.

Second, long tenure in management is associated with innovation. Managerial tenure apparently provides legitimacy and knowledge of how to accomplish tasks and obtain desired outcomes.

Third, innovation is nurtured where there are slack resources.

Finally, inter-unit communication is high in innovative organizations. There is a high use of committee, task forces, cross-functional teams and other mechanisms that facilitate interaction.

4. Innovative organizations tend to have similar cultures:

They encourage experimentation. They reward both successes and failures. They celebrate mistakes. Managers in innovative organizations recognize that failures are a natural

by-product of venturing into the unknown.

5. Human resources:

Innovative organizations actively promote the training and development.

They offer high job security so employees do not fear getting fired for making mistakes.

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A. Stimulating Innovation (cont.) Notes:

They encourage individuals to become champions of change.

2. Once a new idea is developed, idea champions actively and enthusiastically promote the idea, build support, overcome resistance, and ensure that the innovation is implemented.

Champions have common personality characteristics: extremely high self-confidence, persistence, energy, and a tendency to take risks.

They also display characteristics associated with transformational leadership.

Idea champions have jobs that provide considerable decision-making discretion.

Instructor Note: At this point in the lecture you may want to introduce the OB IN THE NEWS EXERCISE: Innovative Concept or Hair-Brain Idea? found in the text and below. A suggestion for a class exercise follows.

OB IN THE NEWS – Innovative Concept or Hair-Brain Idea?

Richard Nobel has a solution to the public’s mounting frustration with airline service. He’s going to create an air-taxi service unlike any other. Travelers will be able to summon one of his planes, like a taxi cab, to a nearby airport and then fly straight to the local airport closest to their destination. The cost? About the same as a first-class ticket.

There are 2,071 airfields in Europe and 5,736 in North America. Yet only 3 percent are used by large commercial jets. Recognizing that there should be a large market for people who want to travel on their schedule, not the airlines, and would prefer a more direct flight, Nobel is creating the basis for a worldwide taxi-system. It would make use of small airports. It would rely on the global-positioning system to monitor flights and guide takeoffs and landings at airports without control towers. And it would have a state-of-the-art Internet based reservation system.

“The airlines think the solution to airport congestion is bigger planes and bigger airports, “ says Nobel. “That’s precisely what passengers don’t want. We’re coming the other way, offering point-to-point service that you schedule at your convenience.”

The most innovative aspect of Nobel’s idea is the development of a low-cost (under $2 million), fuel-efficient plane that would make up his taxi fleet. That plane, dubbed the F1 Air Taxi, will be designed for trips of under 1,000 miles. Able to carry five passengers, this prop-jet would be able to meet or beat the average speed of commercial jets on short hops, get passengers closer to their destination, and avoid the congestion at big airports. The F1 is being built by Pegasus Aviation in the United Kingdom, with 18 companies providing goods and services to minimize costs.

Will the idea work? Only time will tell. But one executive at the firm that is designing Nobel’s Web site and reservation system says, “This is out-of-the box thinking—a whole new approach to airline congestion. I think [Nobel] has a real market—and a small-business aircraft that could take a lot of the market from existing business planes.”

Source: Based on O. Port, “Taxi! Get Me to Nebraska,” Business Week, November 20, 2000, pp. 134–39.

Class Exercise:

1. This activity requires that you have on-line access and computer projection capabilities, or the class can visit the computer lab together, or you can assign it as a separate activity, or print and distribute the ideas to the class.

2. Visit the “Idea a Day” website. Authors of ideas submit them for the enjoyment of all—and many truly exemplify out-of-the-box thinking. The website idea archives can be found at: http://www.idea-a-day.co.uk/archive.asp .

3. Lead a class discussion about what are the commonalities of these ideas. Most of these ideas are submitted by ordinary folks. Break students into groups and have them practice brainstorming ideas. Post on board and compare to the websites ideas. Developing creativity, and hence innovation, is a skill that can be learned and stimulated with practice.

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http://www.idea-a-day.co.uk/archive.asp


B. Creating a Learning Organization Notes:

1. What’s a learning organization?

A learning organization is an organization that has developed the continuous capacity to adapt and change.

All organizations learn—whether they consciously choose to or not; it is a fundamental requirement for their sustained existence.

Most organizations engage in single-loop learning. When errors are detected, the correction process relies on past routines and present policies.

Learning organizations use double-loop learning:

a. When an error is detected, it’s corrected in ways that involve the modification of the organization’s objectives, policies, and standard routines.

b. Like second-order change, double-loop learning challenges deep-rooted assumptions and norms within an organization.

c. It provides opportunities for radically different solutions to problems and dramatic jumps in improvement.

Learning organizations are also characterized by a specific culture that values risk taking, openness, and growth—it seeks “boundarylessness”.

2. Managing learning:

What can managers do to make their firms learning organizations?

a. Establish a strategy.b. Redesign the organization’s structure.c. Reshape the organization’s culture.

Management sets the tone for the organization’s culture both by what it says (strategy) and what it does (behavior).

B. Knowledge Management

1. Knowledge management is a process of organizing and distributing an organization’s collective wisdom so the right information gets to the right people at the right time.

2. KM provides an organization with both a competitive edge and improved organizational performance because it makes its employees smarter.

3. Knowledge management is increasingly important today for at least three reasons.

Intellectual assets are now as important as physical or financial assets. Organizations that can quickly and efficiently tap into their employees’ collective experience and wisdom are more likely to “outsmart” their competition.

Second, as baby boomers begin to leave the workforce, there’s an increasing awareness that they represent a wealth of knowledge that will be lost if there are no attempts to capture it.

Third, a well-designed KM system will reduce redundancy and make the organization more efficient.

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B. Knowledge Management (cont.) Notes:

4. How does an organization record the knowledge and expertise of its employees and make that information easily accessible?

It needs to develop computer databases of pertinent information that employees can readily access.

It needs to create a culture that supports and rewards sharing.

It has to develop mechanisms that allow employees who have developed valuable expertise and insights to share them with others.

C. Managing Change: It’s Culture Bound!

To illustrate, let’s briefly look at five questions.

1. Do people believe change is possible?

In cultures where people believe that they can dominate their environment, individuals will take a proactive view of change—the United States and Canada.

In many other countries, such as Iran and Saudi Arabia, people see themselves as subjugated to their environment and thus will tend to take a passive approach toward change.

2. If change is possible, how long will it take to bring it about?

Societies that focus on the long term (Japan) will demonstrate considerable patience.

In societies with a short-term focus (the United States and Canada), people expect quick results.

3. Is resistance to change greater in some cultures than in others?

Resistance to change will be influenced by a society’s reliance on tradition. Italians focus on the past, while Americans emphasize the present.

4. Does culture influence how change efforts will be implemented?

In high-power-distance cultures (the Philippines or Venezuela), change efforts will tend to be autocratically implemented by top management.

Low-power-distance cultures value democratic methods (Denmark and Israel).

5. Finally, do successful idea champions do things differently in different cultures?

People in collectivist cultures prefer appeals for cross-functional support for innovation efforts.

People in high-power-distance cultures prefer champions to work closely with those in authority.

The higher the uncertainty avoidance of a society, the more champions should work within the organization’s rules and procedures to develop the innovation.

6. Effective managers will alter their organization’s championing strategies to reflect cultural values.

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Work Stress and Its Management Notes:

A. What Is Stress?

1. Stress is a dynamic condition in which an individual is confronted with an opportunity, constraint, or demand related to what he/she desires and for which the outcome is perceived to be both uncertain and important.

2. Stress is not necessarily bad in and of itself. Individuals often use stress positively to rise to the occasion and perform at or near their maximum.

3. Typically, stress is associated with constraints and demands.

The former prevent you from doing what you desire. The latter refers to the loss of something desired.

4. Two conditions are necessary for potential stress to become actual stress.

There must be uncertainty over the outcome, and the outcome must be important.

Only when there is doubt or uncertainty regarding whether the opportunity will be seized, the constraint removed, or the loss avoided that there is stress.

Importance is also critical. If the outcomes are unimportant to the individual—there is no stress.

B. Understanding Stress and Its Consequences

1. The model in Exhibit 19-10 identifies three sets of factors—environmental, organizational, and individual—that act as potential sources of stress.

2. The symptoms of stress can surface as physiological, psychological, and behavioral outcomes.

C. Potential Sources of Stress

1. Environmental factors:

Environmental uncertainty influences stress levels among employees in an organization.

Changes in the business cycle create economic uncertainties.

Political uncertainties can be stress inducing.

Technological uncertainty can cause stress because new innovations can make an employee’s skills and experience obsolete in a very short period of time.

2. Organizational factors:

Pressures to avoid errors or complete tasks in a limited time period, work overload, a demanding and insensitive boss, and unpleasant coworkers are a few examples.

Task demands are factors related to a person’s job. They include the design of the individual’s job (autonomy, task variety, degree of automation), working conditions, and the physical work layout.

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C. Potential Sources of Stress (cont.) Notes:

Role demands relate to pressures that are a function of the role an individual plays in an organization.

a. Role conflicts create expectations that may be hard to reconcile or satisfy.

b. Role overload is experienced when the employee is expected to do more than time permits.

c. Role ambiguity is created when role expectations are not clearly understood.

Interpersonal demands are pressures created by other employees.

Organizational structure defines the level of differentiation in the organization, the degree of rules and regulations, and where decisions are made. Excessive rules and lack of participation in decisions might be potential sources of stress.

Organizational leadership represents the managerial style of the organization’s senior executives.

a. Organizations go through a cycle. b. They’re established, they grow, become mature, and eventually

decline. c. An organization’s life stage—that is, where it is in this four-stage cycle

—creates different problems and pressures for employees. d. The establishment and decline stages are particularly stressful. e. Stress tends to be least in maturity where uncertainties are at their

lowest ebb.

3. Individual factors:

These are factors in the employee’s personal life. Primarily, these factors are family issues, personal economic problems, and inherent personality characteristics.

National surveys consistently show that people hold family and personal relationships dear.

Economic problems created by individuals overextending their financial resources.

A significant individual factor influencing stress is a person’s basic dispositional nature.

4. Stressors are additive--stress builds up.

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D. Individual Differences Notes:

1. Five individual difference variables moderate the relationship between potential stressors and experienced stress:

a. perceptionb. job experiencec. locus of controld. self-efficacye. hostility.

2. Perception: Moderates the relationship between a potential stress condition and an employee’s reaction to it. Stress potential doesn’t lie in objective conditions; it lies in an employee’s interpretation of those conditions.

3. Job experience: The evidence indicates that experience on the job tends to be negatively related to work stress.

a. First is the idea of selective withdrawal. Voluntary turnover is more probable among people who experience more stress.

b. Second, people eventually develop coping mechanisms to deal with stress.

c. Collegial relationships with coworkers or supervisors can buffer the impact of stress.

4. Locus of control:

Those with an internal locus of control believe they control their own destiny. a. Internals perceive their jobs to be less stressful than do externals.b. Internals are likely to believe that they can have a significant effect on

the results.

Those with an external locus believe their lives are controlled by outside forces. a. Externals are more likely to be passive and feel helpless.

5. Self-efficacy: The confidence in one’s own abilities appears to decrease stress

6. Hostility: People who are quick to anger, maintain a persistently hostile outlook, and project a cynical mistrust of others are more likely to experience stress in situations.

E. Consequences of Stress

1. Stress shows itself in a number of ways—physiological, psychological, and behavioral symptoms.

2. Physiological symptoms:

Most of the early concern with stress was directed at physiological symptoms due to the fact that specialists in the health and medical sciences researched the topic.

Physiological symptoms have the least direct relevance to students of OB.

3. Psychological symptoms:

Job-related stress can cause job-related dissatisfaction.

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E. Consequences of Stress (cont.) Notes:

Job dissatisfaction is “the simplest and most obvious psychological effect” of stress.

Multiple and conflicting demands—lack of clarity as to the incumbent’s duties, authority, and responsibilities—increase stress and dissatisfaction.

The less control people have over the pace of their work, the greater the stress and dissatisfaction.

4. Behavioral symptoms:

Behaviorally related stress symptoms include changes in productivity, absence, and turnover, as well as changes in eating habits, increased smoking or consumption of alcohol, rapid speech, fidgeting, and sleep disorders.

The stress-performance relationship is shown in Exhibit 19-11.

a. The logic underlying the inverted U is that low to moderate levels of stress stimulate the body and increase its ability to react.

b. Individuals then often perform their tasks better, more intensely, or more rapidly.

c. But too much stress places unattainable demands or constraints on a person, which result in lower performance.

d. Even moderate levels of stress can have a negative influence on performance over the long term as the continued intensity of the stress wears down the individual and saps his/her energy resources.

In spite of the popularity and intuitive appeal of the inverted-U model, it doesn’t get a lot of empirical support.

F. Managing Stress

1. High or low levels of stress sustained over long periods of time, can lead to reduced employee performance and, thus, require action by management.

2. Individual approaches:

Effective individual strategies include implementing time management techniques, increasing physical exercise, relaxation training, and expanding the social support network.

Practicing time management principles such as:

a. making daily lists of activities to be accomplished.b. prioritizing activities by importance and urgency.c. scheduling activities according to the priorities set.d. knowing your daily cycle and handling the most demanding parts of

your job during the high part of your cycle when you are most alert and productive.

Noncompetitive physical exercise has long been recommended as a way to deal with excessive stress levels.

Individuals can teach themselves to reduce tension through relaxation techniques such as meditation, hypnosis, and biofeedback.

Having friends, family, or work colleagues to talk to provides an outlet for excessive stress.

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Robbins: Organizational Behavior Chapter NineteenF. Managing Stress (cont.) Notes:

3. Organizational approaches

Strategies that management might want to consider include:

a. improved personnel selection and job placementb. use of realistic goal setting, redesigning of jobsc. trainingd. increased employee involvemente. improved organizational communicationf. establishment of corporate wellness programs.

Instructor Note: At this point in the lecture you may want to introduce the CASE EXERCISE: Responding the 9/11 After Shocks found in the text and at the end of the chapter notes. A suggestion for a class exercise follows.

QUESTIONS FOR REVIEW

1. What is meant by the phrase “we live in an age of discontinuity”?Answer – It means that we live in an age of change and disconnection from the past. Things are changing quickly and in ways we could not anticipate, and that these changes have wide-ranging effects. Such as, beginning in the early 1970s, with the overnight quadrupling of world oil prices, economic shocks have continued to impose changes on organizations. Or, the recent economic problems in Russia, Asia, and Latin America rocked world stock markets.

2. “Resistance to change is an irrational response.” Do you agree or disagree? Explain. Answer – One of the most well-documented findings—organizations and their members resist change. It is rational. It is just that resistance to change doesn’t seem rational because it doesn’t necessarily surface in standardized ways. Resistance can be overt, implicit, immediate, or deferred. Implicit resistance efforts are more subtle—loss of loyalty to the organization, loss of motivation to work, increased errors or mistakes, increased absenteeism due to “sickness”—and hence more difficult to recognize. A change may produce what appears to be only a minimal reaction at the time it is initiated, but then resistance surfaces weeks, months, or even years later. A single change that might have little impact becomes the straw that breaks the camel’s back. Reactions to change can build up and then explode in some response that seems totally out of proportion to the change action it follows. The resistance, of course, has merely been deferred and stockpiled. What surfaces is a response to an accumulation of previous changes.

3. Why is participation considered such an effective technique for lessening resistance to change?Answer – It’s difficult for individuals to resist a change decision in which they participated. Prior to making a change, those opposed can be brought into the decision process. Assuming that the participants have the expertise to make a meaningful contribution, their involvement can reduce resistance, obtain commitment, and increase the quality of the change decision.

4. Why does change so frequently become a political issue in organizations?Answer – Because change invariably threatens the status quo, it inherently implies political activity. Internal change agents typically are individuals high in the organization who have a lot to lose from change. What if they are no longer the ones the organization values? Politics suggests that the impetus for change is more likely to come from outside change agents. Managers who have spent their entire careers with a single organization and eventually achieve a senior position in the hierarchy are often major impediments to change. You should expect that long-time career executives will be sources of resistance. This, incidentally, explains why boards of directors that recognize the imperative for the rapid introduction of second-order change in their organizations frequently turn to outside candidates for new leadership.

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5. How does Lewin’s three-step model of change deal with resistance to change?Answer – To deal with that resistance, management could use positive incentives to encourage employees to accept the change. Management might also consider unfreezing acceptance of the status quo by removing restraining forces. Employees could be counseled individually. Each employee’s concerns and apprehensions could be heard and specifically clarified. Assuming that most of the fears are unjustified, the counselor could assure the employees that there was nothing to fear and then demonstrate, through tangible evidence, that restraining forces are unwarranted. If resistance is extremely high, management may have to resort to both reducing resistance and increasing the attractiveness of the alternative if the unfreezing is to be successful.

6. What changes can an organization that has a history of “following the leader” make to foster innovation?Answer – Change refers to making things different. Innovation is a more specialized kind of change. Innovation is a new idea applied to initiating or improving a product, process, or service. There are several sources of innovation. Structural variables include developing an organic structure, providing sufficient resources to permit innovation, and increasing communication. Managers should: encourage experimentation. reward both successes and failures. celebrate mistakes. actively promote the training and development. offer high job security so employees don’t fear getting fired for making mistakes. encourage individuals to become champions of change.

7. “Learning organizations attack fragmentation, competitiveness, and reactiveness.” Explain this statement.Answer – A learning organization is an organization that has developed the continuous capacity to adapt and change. Proponents envision it as a remedy for the three fundamental problems inherent in traditional organizations: fragmentation, competition, and reactiveness. First, fragmentation based on specialization creates “walls” and “chimneys” that separate different

functions into independent and often warring fiefdoms. It fosters communication. Second, an overemphasis on competition often undermines collaboration. It emphasizes cooperation and

coordination. Third, reactiveness misdirects management’s attention to problem solving rather than creation. It has a

proactive perspective.

8. How does an organization build a knowledge-management system?Answer – An organization builds a knowledge management system as it records the knowledge and expertise of its employees and makes that information easily accessible. It does this by developing computer databases of pertinent information that employees can readily access, by creating a culture that supports and rewards sharing, and developing mechanisms that allow employees who have developed valuable expertise and insights to share them with others.

9. How are opportunities, constraints, and demands related to stress? Give an example of each.Answer – Students’ examples will vary but should take into consideration the following facts. Stress is a dynamic condition in which an individual is confronted with an opportunity, constraint, or demand related to what he/she desires and for which the outcome is perceived to be both uncertain and important. Opportunities permit individuals to use stress positively to rise to the occasion and perform at or near their maximum. Typically, stress is associated with constraints and demands. The former prevent you from doing what you desire. The latter refers to the loss of something desired. For opportunities to cause stress, there must be uncertainty over the outcome and the outcome must be important.

10. What can organizations do to reduce employee stress?Answer – Strategies that management might want to consider include improved personnel selection and job placement, use of realistic goal setting, redesigning of jobs, increased employee involvement, improved organizational communication, and establishment of corporate wellness programs.

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QUESTIONS FOR CRITICAL THINKING

1. How have changes in the workforce during the past 20 years affected organizational policies?Answer –A multicultural environment requires greater sensitivity to individual differences requiring training in diversity. Human resource policies and practices changed to attract and keep this more diverse workforce. Large expenditure on training to upgrade reading, math, computer, and other skills of employees.

2. “Managing today is easier than at the turn of the century because the years of real change took place between the Civil War and World War I.” Do you agree or disagree? Discuss.Answer – Begin by having students brainstorm changes they know of that took place between 1860 and 1918. Then brainstorm changes from 1918 until today. List these items on the blackboard. Be prepared to prompt students, because many will not have a timeframe for the changes they note; i.e., electricity, telegraph, the railroad, the car, the airplane, etc.

3. Are all managers change agents? Discuss.Answer – They can be to the degree they change one or more of the following elements in response to changing conditions in the business environment. 1) Changing conditions demand structural changes. Change agents can alter one or more of the key elements in an organization’s design. 2) Competitive factors or innovations within an industry often require change agents to introduce new equipment, tools, or operating methods. 3) The layout of work space is the result of thoughtful consideration of work demands, formal interaction requirements, and social needs. 4) Changing people typically involves changing the attitudes and behaviors of organizational members through processes of communication, decision making, and problem solving.

4. Discuss the link between learning theories discussed in chapter 2 and the issue of organizational change.Answer – Learning is any relatively permanent change in behavior that occurs as a result of experience. We infer that learning has taken place if an individual behaves, reacts, responds as a result of experience in a manner different from the way he formerly behaved. The text definition has several components that deserve clarification. First, learning involves change. Second, the change must be relatively permanent. Third, our definition is concerned with behavior. Finally, some form of experience is necessary for learning.

Learning theory closely parallels Lewin’s three-step change process. Unfreezing the status quo Movement to a new state Refreezing the new change to make it permanent See Exhibit 19-6.

5. Do you think napping on the job is an acceptable practice in the workplace? What negatives do you see, if any, in promoting this practice?Answer –. Student’s answers will vary on this—but most employers have policies against it. Why do they think that is the case? Is napping a stress reliever or theft (assuming the employee is being paid while sleeping)?

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POINT-COUNTERPOINT – Managing Change Is an Episodic ActivityPoint

Organizational change is an episodic activity, starting at some point, proceeding through a series of steps, and culminating in some outcome that leads to improvement. Lewin’s three-step model represents a classic illustration of this perspective. Change is seen as a break in the organization’s equilibrium. The status quo has been disturbed, and change is necessary to establish a new equilibrium state. The objective of refreezing is to stabilize the new situation by balancing the driving and restraining forces. Some experts have argued that organizational change should be thought of as balancing a system made up of five interacting variables within the organization—people, tasks, technology, structure, and strategy. A change in any one variable has repercussions on one or more of the others.

Another way to conceptualize this is to think of managing change as analogous to captaining a ship. Like a large ship traveling across the calm Mediterranean Sea, the ship’s captain makes the exact trip hundreds of times. Every once in a while, however, a storm will appear, and the crew has to respond. The captain will make the appropriate adjustments—that is, implement changes—and, having maneuvered through the storm, will return to calm waters.

Counter PointThe episodic approach may be the dominant paradigm for handling organizational change, but it is

obsolete. It applies to a world of certainty and predictability. It treats change as the occasional disturbance in an otherwise peaceful world. This paradigm has little resemblance to today’s environment of constant and chaotic change. Today’s organizations are not a large ship, but more akin to a 40-foot raft. Rather than sailing a calm sea, this raft must traverse a raging river manned by ten people who have never worked together making much of the trip in the dark. Change is a natural state, and managing change is a continual process. Disruptions in the status quo are not occasional, temporary, and followed by a return to an equilibrium state. There is, in fact, no equilibrium state. Managers today face constant change, bordering on chaos. They’re being forced to play a game they’ve never played before, governed by rules that are created as the game progresses.

Teaching notes1. Use the debate format offered in chapter 1.2. Choose two teams of 3–5 students. [The rest of the class will act as a jury.] 3. Have them prepare, outside of class, one side of the issue to debate in class. 4. Create a controlled debate, giving each side up to 8 minutes to make its case, 3 minutes to cross-examine the

other side, then 5 minutes in class to prepare a 3–5 minute rebuttal, and then a final 1-minute closing argument.

5. Have the remainder of the class vote on who made the stronger case. 6. Close with a discussion of the issue leading the students to understand this is not an either/or situation, but

the best response incorporates elements of both positions.7. Refer to Chapter 1 for the time format.8. This will take approximately 45–60 minutes.

This perspective is based on P.B. Vail, Managing as a Performing Art: New Ideas for a World of Chaotic Change (San Francisco: Jossey-Bass, 1989).

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Team Exercise -- Power and the Changing Environment

Objectives

1. To describe the forces for change influencing power differentials in organizational and interpersonal relationships.2. To understand the effect of technological, legal/political, economic, and social changes on the power of individuals within an organization.

The Situation Your organization manufactures golf carts and sells them to country clubs, golf courses, and consumers. Your team is faced with the task of assessing how environmental changes will affect individuals’ organizational power. Read each of the five scenarios and then, for each, identify the five members in the organization whose power will increase most in light of the environmental condition(s).

(m) = male (f) = femaleAdvertising expert (m) Accountant-CPA (m) Product designer (m)Chief financial officer (f) General manager (m) In-house counsel (m)Securities analyst (m) Marketing manager (f) Public relations expert (m)Operations manager (f) Computer programmer (f) Human resource manager (f)Corporate trainer (m) Industrial engineer (m) Chemist (m)

1. New computer-aided manufacturing technologies are being introduced in the workplaceduring the upcoming 2 to 18 months.2. New federal emission standards are being legislated by the government.3. Sales are way down; the industry appears to be shrinking.4. The company is planning to go international in the next 12 to 18 months.5. The U.S. Equal Employment Opportunity Commission is applying pressure to balancethe male–female population in the organization’s upper hierarchy by threatening to publicize the predominance of men in upper management.

The Procedure 1. Divide the class into teams of three to four students each.2. Teams should read each scenario and identify the five members whose power will increase most in light of

the external environmental condition described.3. Teams should then address the question: Assuming that the five environmental changes are taking place at

once, which five members of the organization will now have the most power?4. After 20 to 30 minutes, representatives of each team will be selected to present and justify their conclusions

to the entire class. Discussion will begin with scenario 1 and proceed through to scenario 5 and the “all at once” scenario.

Source: Adapted from J. E. Barbuto, Jr., “Power and the Changing Environment,” Journal of Management Education, April 2000, pp. 288–96.

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CASE EXERCISE – Responding to the 9/11 Aftershocks

Sheryl Hicks is not a complainer. If she has a major ache, she usually suffers in silence. Although her employer, Atlantic Mutual Insurance, has an employee assistance program—to provide emotional and psychological support in the workplace—she certainly would never think to use it, even if she did have a worry on her mind. “They say it’s confidential, but who really knows?” asked Ms. Hicks, an administrative assistant at the insurance company.

But Sheryl Hicks’ life changed on September 11, 2001. Her office at 130 Broadway in New York City, was near the World Trade Center. “I watched the whole thing from my 33rd-floor office window.”

Ms. Hicks had never seen bodies fall from high rises or planes slam into buildings and cause them to crumble. She had never been covered with jet fuel, as she was when she fled the area on that day. Nor had she ever had such vivid nightmares that forced her to relive 9/11 over and over.

“Every time I talked to people they wanted details, which made it worse for me,” said Ms. Hicks. “I had so much anger about what had happened to my life and the lives of so many people and the city where I’ve worked for 36 years.”

Two weeks after 9/11, Ms. Hicks was still suffering serious aftereffects. Even though she lives on Staten Island and Atlantic Mutual’s offices have been temporarily relocated to Madison, New Jersey, not an hour goes by when she doesn’t have flashbacks of her experiences on 9/11.

Source: Based on A. Ellin, “Traumatized Workers Look for Healing on the Job,” New York Times, September 30, 2001, p. BU-10.

Questions1. What should Atlantic Mutual’s management do, if anything, to cope with the aftereffects of 9/11?2. How long would you expect employees to be adversely effected by 9/11 if a company provided no formal

assistance for dealing with anger and stress?3. What, if anything, should management do about employees who appear to be suffering from this trauma but

will neither admit it nor accept help from their employer?4. At what point does employee assistance in dealing with this trauma step over the line and become an

invasion of an employee’s privacy?

Student’s answers will vary on the above questions. Encourage them to think about what would happen to the organization if it did nothing to assist Ms. Hicks and other employees like her. What do we think the likely outcomes would be given our study OB?

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Exploring OB Topics on the World Wide Web

Search Engines are our navigational tool to explore the WWW. Some commonly used search engines are:

www.goto.com www.google.com

www.excite.com www.lycos.com

www.hotbot.com www.looksmart.com

1. What would be your strategy if you were called upon to be a “change agent” for your organization? How would you begin, gather information, and create buy-in for your ideas? Go to FastCompany’s website where they featured an article on this topic at: http://www.fastcompany.com/online/05/changetips.html . Even more interesting, read several of the reader responses linked at the bottom of the page. Write a short reaction paper on why you think there is such a difference from the article’s perspective vs. the readers’ comments. What OB strategies would you use as change agent to address some of those readers’ concerns.

2. Resistance to change is a concern when making organizational changes—but as we read in the text—to be expected. Read about the Theory of Constraints (TOC) model used by some organizations to better know where resistance is and how to develop a strategy for addressing it. Visit: http://www.focusedperformance.com/articles/resistance.html to find an article on TOC and how to take advantage of resistance. Print and bring to class for further discussion.

3. What’s the difference between Learning Organizations and Organizational Learning? For a brief overview of the two, go to: http://www.brint.com/papers/orglrng.htm . Develop a table outlining the differences between the two and bring to class for further discussion.

4. Write a two page paper on Knowledge Management. It can be a general paper, or you can choose to focus on different aspects of KM such as the challenges of such system or how KM enhances organizational effectiveness or innovation. For an overview on Knowledge Management go to: http://www.outsights.com/systems/kmgmt/kmgmt.htm as a place to start. Don’t hesitate to do your own search—there are many, many interesting sites on this topic.

5. Knowledge Management requires a commitment to the continuing development of organization’s intellectual resources—people! This often means more training, and it needs to be better and faster. Visit: http://www.reengineering.com/articles/jul96/spotlight.htm to learn about the concept of JITT or Just In Time Training. Write a few paragraphs on what you learned from the page. Also, did anything you learned surprise you? Print and bring to class.

6. Dealing with individual stress requires a knowledge of various coping skills and the willingness to put them into practice. Visit: http://www.shpm.com/articles/stress/stress2.html for tips on how to deal with everyday stressors. For tips on how deal with “college blues” visit the International Stress Management Association’s journal archives at: http://www.isma-usa.org/article0701.htm .

7. Visit the Oklahoma State University’s Environmental Health and Safety On-line Library for a collection of articles and other resources for stress management at: http://www.pp.okstate.edu/ehs/links/stress.htm . Select and article or two to read that interests

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http://www.pp.okstate.edu/ehs/links/stress.htm

http://www.isma-usa.org/article0701.htm

http://www.shpm.com/articles/stress/stress2.html

http://www.reengineering.com/articles/jul96/spotlight.htm

http://www.outsights.com/systems/kmgmt/kmgmt.htm

http://www.brint.com/papers/orglrng.htm

http://www.focusedperformance.com/articles/resistance.html

http://www.fastcompany.com/online/05/changetips.html

http://www.looksmart.com/

http://www.hotbot.com/

http://www.lycos.com/

http://www.excite.com/

http://www.google.com/

http://www.goto.com/

Robbins: Organizational Behavior Chapter Nineteenyou and print. Bring them to class and be prepared to make a short presentation on what you learned.

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Organizational Change and Stress Management

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Transcript of Organizational Change and Stress Management